Correlation Between One World and BCM Resources
Can any of the company-specific risk be diversified away by investing in both One World and BCM Resources at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining One World and BCM Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between One World Lithium and BCM Resources, you can compare the effects of market volatilities on One World and BCM Resources and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in One World with a short position of BCM Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of One World and BCM Resources.
Diversification Opportunities for One World and BCM Resources
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between One and BCM is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding One World Lithium and BCM Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BCM Resources and One World is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on One World Lithium are associated (or correlated) with BCM Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BCM Resources has no effect on the direction of One World i.e., One World and BCM Resources go up and down completely randomly.
Pair Corralation between One World and BCM Resources
Assuming the 90 days horizon One World Lithium is expected to generate 1.28 times more return on investment than BCM Resources. However, One World is 1.28 times more volatile than BCM Resources. It trades about 0.03 of its potential returns per unit of risk. BCM Resources is currently generating about -0.01 per unit of risk. If you would invest 3.10 in One World Lithium on September 12, 2024 and sell it today you would lose (1.79) from holding One World Lithium or give up 57.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
One World Lithium vs. BCM Resources
Performance |
| Timeline |
| One World Lithium |
| BCM Resources |
One World and BCM Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with One World and BCM Resources
The main advantage of trading using opposite One World and BCM Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if One World position performs unexpectedly, BCM Resources can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in BCM Resources will offset losses from the drop in BCM Resources' long position.| One World vs. BCM Resources | One World vs. Western Magnesium | One World vs. Aurelia Metals Limited | One World vs. Juggernaut Exploration |
| BCM Resources vs. Edison Cobalt Corp | BCM Resources vs. Champion Bear Resources | BCM Resources vs. Avarone Metals | BCM Resources vs. Adriatic Metals PLC |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |